VendableThe Vendio eCommerce Blog

This year we saw the introduction of the diamond level sellers, which are very high volume sellers that eBay has set out to attract. This may be a very very good thing for the small to medium size sellers and have some unintended consequences that eBay will probably have to struggle with.

How many diamond level sellers can easily navigate the unrelenting march of eBay changes? Its very easy for a small seller to be nimble and adjust to any changes, its quite another when you need to change an entire organization (which is what has to happen at the diamond level).

I’ve often thought that once eBay had a significant number of diamond sellers that the changes would have to occur at a slower pace, as behemoths are just as not agile – In this area, having large diamond level sellers actually will help steady eBay and force them to behave in a manner that brings a cohesiveness to the manner and methods they use to release changes.

I also wonder about the balance of power. If I was sending out a million packages a week, I can pretty much set my terms with UPS and they would do pretty much anything to keep my account. Will the same thing occur at the eBay diamond level? Will diamond sellers begin demanding and getting some of items sellers have been requesting for years. If diamond level sellers want the off-eBay advertising removed, for instance, will they get it?

4 Responses to “The eBay Balance of Power”

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Of course the balance of power will change. Suppose Buy.com decides the eBay business isn’t worth the hassle and decides to bail in Q1 2009. For whom would it be more embarrassing, Buy or eBay? Ans: eBay. Buy doesn’t have an entire corporate strategy based on selling on eBay. It already has n selling channels; eBay is just n+1. But eBay does have an entire corporate strategy based on attracting Diamonds such as Buy.com. If the first and largest of the Diamonds jumps ship, this is very bad PR for eBay’s “turnaround” story.

Now let’s posit an even more likely scenario: Buy.com finds it is making a profit on eBay, but it’s only making 5% profit while it’s paying 8% to eBay/Paypal (even with free listings), and its additional customer service costs are more than it had reckoned for, eBay customers being a relatively needy bunch.

Unlike the little guy, Buy.com doesn’t have to just take it or leave it. They can use their leverage to renegotiate. They’re fools if they don’t. I wonder when their initial contract runs out?

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